Australia's central bank is confident households will be able to absorb the cost of rising interest rates, but remains cautious about the high debt-to-income levels brought on by the recent property boom.
Delivering a speech to the Economics Society Australia in Brisbane, Reserve Bank deputy governor Michele Bullock outlined stronger lending standards and higher savings levels would assist the majority of borrowers to cope with rising interest payments associated with their loans.
The speech was sparked by the RBA's decision to hike interest rates to curb surging inflation which is forecast to run at an annualised rate of 7 per cent by the end of year.
